View full sizeIndicted N.J. engineering firm Birdsall Services Group said today it plans to file for bankruptcy. The company and seven current and former high-ranking officials were charged with conspiracy and money laundering.Screenshot of www.birdsall.com

TRENTON — The Birdsall Services Group, a major public engineering firm charged with conspiracy and money laundering, filed for bankruptcy today after company officials and the Attorney General’s Office failed to reach an agreement that would allow it to keep paying its employees and continue operating.

The unexpected legal maneuver was an attempt by Birdsall to sidestep state prosecutors, who on Tuesday seized the company’s $41.6 million in assets, including $5.4 million in cash, when a state grand jury indicted the firm and seven top executives.

In court documents, the Eatontown-based company asked a federal judge to void the seizure and allow it to have access to its cash to prevent it from permanently shutting down. The firm also said the move was needed to protect its rights under bankruptcy and the rights of those to whom it owes money.

“This will better allow us to re-organize our company, handle our payroll and operational budget and continue to provide engineering services consistent with our tradition of professional excellence,” the company’s president and chief executive, Ralph Orlando, said in a statement.

The Attorney General’s Office declined to comment.

The Chapter 11 filing comes after the company and its top officials, including the retired chief executive, Howard Birdsall, were indicted for conspiring over six years to funnel money through employees to the same elected officials awarding them millions of dollars in public contracts.

Two sources familiar with the case told The Star-Ledger that the company and state prosecutors had been negotiating an agreement that would have allowed it to gain access to some of its money. But when those talks failed, the company was unable to pay its 325 employees today.

Orlando said in a company-wide email sent out Thursday and obtained by The Star-Ledger that he was “disappointed” by the development but expected to be able to meet payroll next week. Court documents said the state’s seizure had caused “serious damage” to the company.

According to the bankruptcy filing, Birdsall made $5.6 million before tax last year on net revenue of $49.5 million. It also said the company had total liabilities of $29.4 million, including $45,150 owed to Montclair State University’s College of Science and Mathematics.

The documents also outline the company’s $41.6 million in assets includes $5.3 million worth of work in progress.

Prosecutors claim that from 2006 to 2012, the company and its high-ranking officials disguised more than $686,000 in contributions by writing, or asking employees to write, checks of $300 or less — which are not required by law to be disclosed — and then illegally reimbursing them through bonuses.

The bonuses were required to be reported to the state Election Law Enforcement Commission as corporate campaign contributions, authorities said, but the company routinely lied in disclosure reports to avoid being disqualified from holding or bidding on new public contracts.

Authorities have declined to say which elected officials or political groups received the contributions, but noted money went to Republicans and Democrats alike. The pay-to-play case is considered by experts to be one of the most significant in state history.

The most recent reports filed with the state Election Law Enforcement Commission show the company received more than $28 million in public contracts in 2011, and $86.7 million since the start of 2008. Some local governments have already stopped doing business with Birdsall or are reconsidering current contracts.